1. What is car rental and what is its purpose?
A car rental or car hire agency is a company that rents automobiles to the public for a short period of time ranging from few hours to few weeks for the money.
1.1 Advantages of Car rental Business:
You can put as much time as you want into your business to gain some initial experience. You can start it small and learn when growing.
2. Less startup cost
When compared, the cost of the rental car business is much less than other businesses.
A car rental is an immediate solution for the customer’s travel problems. You solve them immediately and get rewarded for it.
Based on the customers and the income you receive from the business, there is always scope for you to scale your business higher.
5. Unlimited Income
With a car rental business, you can never predict the income you receive. As long as you work hard and serve the customers, you will get paid for the hard work. So this can be a profitable business.
1.2 Disadvantages of Car rental Business:
1. High competition.
The competition in this car rental industry is more than what you expected. So it is better for someone to do the market research and customer demand before entering it.
2. Long sales project.
A car rental business is a long-term business that needs money and time investments. So it is important for the business owner to plan and execute the business plan accordingly and predict the business.
3. Can be time demanding.
As it is a start for a long-term business, you should always make sure that you are available 24/7 for all the business queries. All decisions are to be taken by you sometimes, so it can be rewarding or challenging sometimes.
4. Inconsistent work.
Work can be inconsistent so as is the income. As a car rental business, the amount of work will be less or more but never stable. So it is important to have a consistent plan and set boundaries for a better budget outflow.
5. Tax payment.
As you are a sole proprietor of the business you have to pay the self-employment taxes which can be high sometimes. So calculating the tax amount and budget is important to know if the business is worth doing or not.
2. How does Car Rental work?
Renting a car is a more convenient option for anyone who needs a vehicle for temporary vacations, events, and many more. However, the process of renting a car varies from place to place. Renting a car is usually easy, that includes contacting the car rental agency and answering a few of their questions, and saying your budget.
The first thing that company is going to ask is the time period of renting a car and the budget. So that they give the right recommendations for your budget. Once you know what you are looking for, you can rent a car in less than 10 minutes and enjoy your ride.
3. Is Car Rental Business Profitable?
The rental car business is booming every single day. It is also expected that in the coming years it will grow in both developed and developing countries. Currently, the global rental car market is valued at $92.92 billion and is estimated to reach $214.04 billion by 2027.
So with all these statistics, it is pretty clear that the car rental business is definitely a profitable business for an individual to start with.
4. How to Start a Car Rental Business in India?
Below given are the 7 steps that help you build or start your own car rental business in India.
4.1 Conduct a thorough Review.
Good research and proper preparation about the market and strategies can be highly beneficial for any business and helps in reducing the danger.
You have to properly know about the industry and your competitors before getting into the industry.
4.2 Choose a Business Strategy for Car Rentals.
Having a strategy before jumping into the business helps it in the long run. You have to decide if the business you want to start is offline, online, or both, renting cars on an hourly basis or contracts, and many more details. This will help you stand out from other car rental companies.
4.3 Choose the Right Business Model.
The next will be focusing on growing your company. The question here is whether you buy any extra cars or just lease the existing cars for a specific period of time. Also, you have to make sure that the cars are always in working condition.
4.4 Register Your Business.
To start and run your business and public entity is a must in India. It also entails the details like establishing contractual contracts between aggregators demanding registration for taxes, like GST registration on car rental company providers, and filing for a patent for your name.
4.5 Check for Licenses if Required.
The first and basic step is filling out the vehicle rental license application and to get it notarized. The next important part is an insurance check for the insurance companies and finding the best one at an affordable price.
4.6 Name Your Business.
The name of the business often shows an impact on the business so make sure to find something easy to pronounce, catchy and meaningful and get it registered.
4.7 Car Rental Pricing.
Pricing is also one of the important parts of the business. You have to decide whether you are charging on an hourly basis or per kilometer or daily basis. The class of the car that is offered by the company is also a factor that determines the price. A regular car will cost you less than a luxury one.
Running a car rental company is not only profitable but also has its risks. With all the points mentioned above the process of starting becomes easy but not running it. If you want to start a car rental business as competitive as Uber and Ola, we are here to help you out. Contact us and get a free quote, and we will take care of the rest.